Southern Company, which provides energy to 9 million customers, committed on May 27 to eliminate net carbon emissions from its operations by 2050. Southern's ambitions now match those of Duke Energy, Xcel Energy, and many other large investor-owned utilities in the United States.

These commitments are welcome steps toward a low-carbon economy, but the utilities that are making them acknowledge they do not now have all the tools for the job. Key technologies — clean hydrogen production, carbon capture and storage, and long-duration energy storage among them — are not ready for widespread cost-competitive commercial deployment.

The federal government should step in to help fund projects that will demonstrate the real-world viability of such large-scale, capital-intensive technologies, an endeavor that is typically too risky for private companies to take on alone.

Jump-starting preparatory work on such projects now will bolster the economic recovery from the COVID-19 pandemic. Reforming their management over the longer-term will help assure the demonstration portfolio achieves the ultimate goal of drastically cutting emissions, while also creating new, low-carbon domestic industries.

Getting to net-zero emissions will demand that utilities adopt innovative technologies. Southern Company states that its strategy may include direct air capture of carbon dioxide, a technology that is currently far too expensive to be deployed at scale. Duke's strategy notes that it expects "zero-emitting load-following resources" like advanced nuclear power and clean hydrogen to provide 30% of its generation by 2050, requiring "significant innovation" during the 2020s.

Despite their stated interest, investor-owned utilities are reluctant to take on the massive risks of being first movers on such technologies. After putting hundreds of millions, if not billions, of dollars into pioneering projects, the risk-taker may lose its shirt when unproven technologies fail to perform as expected — a lesson Southern knows all too well.

Federal cost-sharing is usually required to get early projects over this hurdle and build confidence among private investors to fully fund follow-on projects. Federal support for civilian nuclear power in the 1950s helped to commercialize the light water reactors that provide much of the world's nuclear power today.

A demonstration of post-combustion carbon capture, storage, and sequestration (CCS) technology at a coal-fired power plant in Texas, completed in 2017 with partial funding from the U.S. Department of Energy, has encouraged planning for follow-on projects in Illinois, North Dakota and New Mexico. The know-how gained in demonstration projects can also lead to cost reductions in later projects. One estimate for CCS puts the capital cost of a second-generation project 67% below the first.

The Texas project was part of a wave of energy demonstration projects funded by the 2009 Recovery Act. It encompassed not only CCS, but also biorefineries, energy storage, enhanced geothermal, and many other clean energy technologies. Sadly, that funding has dried up, and today the federal clean energy demonstration portfolio is anemic.

The time to reboot it is now. While the climate benefits of these projects will take a decade or more to be realized, they can begin to make modest economic contributions immediately, and these will grow substantially within a few years.

To make such projects "shovel-ready" and greatly enhance the likelihood of their successful completion, front end engineering and design (FEED) studies and preliminary environmental reviews must be carried out. Such preparatory work would pump millions of dollars into firms that are hurting at the moment, which will support some workers near where projects would be built.

Once shovels touch dirt a year or two later, each project will employ a small army of skilled and unskilled construction workers, stimulating local, often rural, economies. Some of these workers may become permanent operators of the projects over the longer-term.

Successful demonstration projects provide national economic benefits as well as local ones. DOE-funded demonstration projects helped the United States to become the global leader in shale gas production. Once U.S.-based firms gain leadership, they are well-positioned to export the new technology to the rest of the world, accelerating the global energy transition.

We do not want to oversell the economic stimulus benefits of clean energy demonstration projects. Most such benefits will not be realized overnight but will build over a few years. In addition, some technologies will not prove to be viable, and these must be dropped from the portfolio, even if jobs are lost, so that others can be tried.

Yet, the economic benefits of rebuilding the energy demonstration portfolio would not be insubstantial, and the climate benefits will be incalculable. Congress should act quickly and decisively to contribute to the recovery now and emissions reductions later. We propose two sets of actions:

First, Congress should immediately authorize new demonstration projects and allow the DOE to begin work to site, engineer, and finance them so that developers can break ground as soon as possible. Passing the American Energy Innovation Act (S.2089), a bill with broad bipartisan support, which authorizes 17 such projects, would be a great start. Ultimately, we foresee an annual investment in the clean energy demonstration portfolio of $5 billion or more, which would add a few very large projects and many smaller ones each year.

Second, Congress should reform how the federal government oversees demonstration projects. We recommend the establishment of a new Office of Major Demonstrations within the DOE. This office would be able to hire experts with the right skills and gain the necessary authority to maximize the impact of these high-risk, high-reward investments.

There is widespread support in the United States and around the world for rebuilding a cleaner economy in the wake of the COVID crisis. Clean energy demonstration must be part of the solution. Together, Congress, DOE, and U.S. companies can lay the foundation for a prosperous, low-carbon future.